Multiple China banks cut Yuan deposit rates, likely lowering interest rates on existing mortgages

A slew of China banks cut interest rates on Yuan deposits early Friday while citing the readiness to ease the pressure from lower mortgage rates, per Reuters.

Among them, ICBC, China Industrial Bank, Agricultural Bank of China and Bank of China (BoC) gained major attention.

That said, the ICBC and BOC reduced the one-year Yuan deposit rate by 10 basis points (bps) to 1.55% and cut the two-year rate by 20 bps to 1.85% starting from September 01. Furthermore, the Three- and five-year deposit rates were cut by 25 bps.

“Some state-owned banks are expected to soon lower interest rates on existing mortgages as Beijing ramps up efforts to revive the debt crisis-hit property sector and bolster a sputtering economy,” said Reuters.

It's worth noting that China's central bank, namely the People's Bank of China (PBoC) also announced early Friday that it will lower the foreign exchange reserve requirement ratio to 4%, from 6.0%, effective from September 15.

Following the PBoC announcements, Reuters came out with the details on how it would affect the markets while suggesting a freeing of the $16.4 billion worth of foreign exchange funds from the July-end level of $821.8 billion. Further, the move should lower the US Dollar funding costs and reverse the latest Yuan gains, per Reuters. Additionally, the news also states a few Chinese banks selling the US Dollar to help the domestic currency.

Also read: USD/CNH slides to three-week low around 7.2400 on PBoC RRR cut, upbeat China PMI, focus on US NFP

AUD/USD remains pressured

AUD/USD holds lower grounds near the intraday bottom of around 0.6480 by the press time.

Also read: AUD/USD grinds higher past 0.6450 as China Caixin Manufacturing PMI, US NFP loom

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